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Taxable income is the part of your income that remains after applying the allowances you are entitled to; Income Tax is then charged at the rates for your band. For the 2026–27 tax year (6 April 2026 to 5 April 2027), the standard Personal Allowance is £12,570. If PAYE has taken too much, HM Revenue & Customs (HMRC) may correct the amount through a new tax code during the year or reconcile it after 5 April with a P800 calculation or, for some taxpayers, a Simple Assessment letter.
This guide applies to UK individual Income Tax, with the detailed rates shown for England, Northern Ireland and Wales. Scottish rates for non-savings income are different. The PAYE correction steps are aimed at employees and pensioners; people who file Self Assessment follow their return and tax-bill process instead.
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What is taxable income?
Taxable income is the income on which Income Tax is calculated after the relevant allowance has been deducted. HMRC’s definition of the Personal Allowance is “the amount of income a person can get before they pay tax.” Your total income for the year can include pay from employment, pensions and other taxable sources. Looking at only one payslip can therefore give a misleading picture: HMRC considers the combined position for the tax year.
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Once allowances have been applied, the remaining amount is divided between tax bands. The tax code sent to an employer or pension provider is an instruction for collecting that expected tax through PAYE; it is not, by itself, a final calculation of your annual liability.
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What is my Personal Allowance in 2026–27?
The standard Personal Allowance is £12,570 for 2026–27. It is subject to an income limit of £100,000. Above that limit, it falls by £1 for every £2 of income and can be reduced to nil. The taper means that someone with income just above £100,000 may have only part of the standard allowance, while someone sufficiently above the taper range may have none.
The allowance normally applies once across the tax year, even if you have two jobs, several pensions or another taxable source. HMRC can allocate the allowance between PAYE sources through your tax codes, but the combined result must reflect your total circumstances.
Other allowances that may apply
Eligibility is specific and should be checked against HMRC’s guidance rather than assumed. For 2026–27, HMRC lists a maximum Married Couple’s Allowance of £11,700 and a minimum of £4,530, and a Blind Person’s Allowance of £3,250. These are separate questions from the standard Personal Allowance and do not automatically apply to every taxpayer.
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The following figures are HMRC’s 2026–27 bands for taxable income after allowances in England, Northern Ireland and Wales. They are not the Scottish non-savings rates. The starting rate for savings has conditions, so not every taxpayer can use the full amount shown.
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| Band or rate | 2026–27 amount | How to read it |
|---|---|---|
| Starting rate for savings | 0% on up to £5,000 | Available only where the relevant savings-income conditions are met. |
| Basic rate | 20% on the next £37,700 | Applies to taxable income in the basic-rate band after allowances. |
| Higher rate | 40% from £37,701 to £125,140 | Applies to the portion in this band, not to all income automatically. |
| Additional rate | 45% above £125,140 | Applies to taxable income over £125,140. |
Band limits are marginal: reaching a higher band does not make all of your income taxable at that higher percentage. Your applicable nation, type of income and available allowances all matter. If you live in Scotland, check the current Scottish Income Tax rates before using the table.
How do multiple jobs and pensions affect tax?
You generally have one Personal Allowance for the tax year, not one per employer. HMRC may give the allowance to your main job and tax another job or pension at a code such as BR, D0 or D1. The correct allocation depends on all your income, benefits and deductions.
A code of 1257L is used for most people with one job or pension. HMRC can alter the numbers or letter when it estimates untaxed income, taxable benefits or other deductions. A code that looks unfamiliar is not automatically wrong, but it should match your current circumstances and the information HMRC holds.
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Use the following sequence. It separates an incorrect code from a payroll calculation that has applied the right code incorrectly.
- Locate the tax code. Read the code on your latest payslip and compare it with the code shown in HMRC’s online service or app.
- Resolve a mismatch. If the employer’s code differs from HMRC’s record, speak to the employer or pension provider and ask which code they are using and when it was received.
- Check the code’s meaning. Confirm that it reflects your current jobs, pensions, taxable benefits, untaxed income and deductions. Report changes to HMRC so its estimate can be updated.
- Check the arithmetic. Put the payslip’s gross pay and tax code into HMRC’s estimate-your-tax tool and compare the result with the Income Tax deduction. If the code matches but the amount deducted does not, raise the calculation with the employer or pension provider.
- Consider the whole year. Do not infer a refund from one payslip or from the code alone. Total income, earlier pay and tax, and the eventual annual position determine whether you overpaid.
National Insurance is a separate deduction with different rules. A payslip can therefore have correct Income Tax and a different National Insurance result; do not combine the two when checking an Income Tax overpayment.
Why have I overpaid tax?
An overpayment usually means more Income Tax was collected through PAYE than your final liability for the year. Typical triggers include a tax code that does not reflect a new or ended job, an incorrect estimate of untaxed income or taxable benefits, the Personal Allowance being allocated incorrectly between employments, or a payroll system applying a code or year-to-date figures incorrectly.
HMRC and your employer may hold different information for a period. For example, HMRC may have changed a code but the payroll run may not yet have used it. The payslip check above identifies which record needs correcting; it does not establish the final refund by itself.
How is an overpayment corrected during the tax year?
If HMRC updates your code and has the income details needed to calculate the difference, it sends the revised code to your employer or pension provider. When that code is used, payroll recalculates the year-to-date position and normally repays the difference through pay.
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- For someone paid monthly, HMRC says the refund is usually in the next or following pay after the new code is used.
- For someone paid weekly, HMRC says it is usually in the third pay after the new code is used.
These are HMRC’s usual timings, not a guarantee for every payroll cycle. If HMRC does not have the necessary income information, it cannot issue the in-year refund yet. Where relevant, information from a P45 from a previous job can help complete the record. Check the first payslip using the new code and contact the employer if the expected adjustment is absent.
What happens after 5 April?
After the tax year ends, HMRC compares the employment, pension and benefit information it has received with the tax collected. An employee or pensioner whose PAYE position is wrong may receive a P800 tax calculation or a Simple Assessment letter, generally between June and March of the following tax year.
People registered for Self Assessment do not receive those same letters for the purpose covered by their return. Their overpayment or underpayment is dealt with through the Self Assessment return and resulting bill.
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How do I claim a tax refund?
If your P800 says a refund is due
- Read the P800 carefully and use the repayment method it specifies. Depending on your circumstances, HMRC may offer an online claim through its service, your personal tax account or its app, or a cheque route.
- Check the bank details before submitting an online claim and keep the calculation and confirmation for your records.
- If you request a cheque, follow the letter’s instructions rather than submitting a second claim through another route.
HMRC’s current guidance states that an online claim is paid within 5 working days; a cheque requested by the taxpayer takes 6 weeks; and a cheque HMRC says it will send automatically should arrive within 14 days of the letter. These are stated service timings and can be affected by verification or other case details.
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If you have not received a P800
Check your HMRC online record first. A reconciliation may not yet have been completed, HMRC may be missing income information, or your circumstances may put you in Self Assessment instead. Do not submit a duplicate claim simply because a letter has not arrived; use HMRC’s contact route to ask what information is outstanding.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What if the P800 calculation is wrong?
Contact HMRC and identify the exact figures you dispute. State the amount shown, the amount you believe is correct, and the document or payment record supporting the difference. HMRC says it will issue a new calculation if it agrees, or explain its position if it does not. Keep payslips, P45s, P60s and relevant pension or benefit statements so you can identify which income or tax figure is missing or duplicated.
Should I use PAYE correction or Self Assessment?
| Your situation | Route to use | What to do first |
|---|---|---|
| Still within 6 April 2026 to 5 April 2027 and taxed through PAYE | In-year tax-code correction | Compare the payslip code with HMRC’s record, report changes and ask payroll to apply the revised code. |
| Year ended and you are an employee or pensioner not filing Self Assessment for this issue | P800 or Simple Assessment reconciliation | Review the calculation and follow its repayment or payment instructions. |
| Registered for Self Assessment | Tax return and bill | Correct the income and tax figures on the return; the bill is adjusted through that process. |
| Code appears right but deduction is calculated incorrectly | Payroll investigation | Give the employer the gross pay and code comparison and ask it to check the calculation. |
| HMRC’s annual calculation contains a disputed amount | HMRC review | Contact HMRC with the specific figures and supporting records. |
What if I underpaid instead?
The same reconciliation can reveal an underpayment. HMRC usually collects a P800 underpayment through a changed tax code when you pay through an employer or pension provider, have enough income above your Personal Allowance, and owe less than £3,000. If those conditions do not apply, HMRC writes with payment instructions. If you disagree, respond with the exact income and tax amounts you believe are wrong.
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This article concerns individual UK Income Tax and PAYE. National Insurance, Capital Gains Tax, Corporation Tax and tax on interest have distinct rules and correction routes. Savings income can also be subject to the specific starting-rate conditions in the table; do not apply that 0% figure automatically. Finally, tax thresholds and procedures can change, so verify the year and nation shown on any HMRC notice before acting.
The Bottom Line
For 2026–27, start with the £12,570 standard Personal Allowance, then check how your total income falls into the applicable bands. Compare your payslip code with HMRC’s record; correct a mismatch during the year, and use the P800, Simple Assessment or Self Assessment route that matches your circumstances after 5 April.
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